Henry Ford, Ascension to combine in $10.5-billion Michigan health care system
Henry Ford Health announced Wednesday that it has signed an agreement to join with Ascension Michigan and Genesys to create a $10.5 billion health system based in Detroit with 13 acute-care hospitals, roughly 50,000 employees and more than 550 sites for regional health care.
“Together we can expand health care services and deliver innovations in care — from prevention and early detection through the treatment of complex conditions — to more people and communities across our state, including those who are most vulnerable,” Robert Riney, president and CEO of Henry Ford Health, said in a statement. “We share a deeply-rooted dedication to providing world-class healthcare that everyone deserves, regardless of geographic, demographic, or socioeconomic status.”
The agreement was described as neither a merger nor an acquisition. Rather, Henry Ford Health says it is a joint venture that includes no exchange of cash. The deal must undergo regulatory review, but the leaders of Henry Ford Health and Ascension Michigan hope to complete the transaction by summer.
Riney is to lead the organization, which would remain headquartered in Detroit and carry Henry Ford Health's name and branding. It would be governed by a board of directors with representatives from both Henry Ford Health and Ascension Michigan. At least for now, the Catholic identity of the Ascension Michigan facilities would continue.
Few details on proposed deal, which could face regulatory challenges
Neither Henry Ford Health nor Ascension Michigan would grant the Free Press an interview with any of the leaders who negotiated the agreement. They also did not answer roughly two dozen questions about how the union of these health systems would affect the hundreds of thousands of patients they treat or their employees.
Henry Ford spokesperson Dana Jay said only: "We look forward to addressing more details about this joint venture down the road; the press release and fast facts material have what we can share for now."
It remains unclear:
Who would own the newly combined health system.
How soon Henry Ford’s branding would be applied to Ascension Michigan properties.
How prices for services and insurance coverage at the hospitals might be affected.
Whether there would be layoffs or site closures as a result of the deal or how existing labor unions would be affected.
How much of the market share this combined health system could have in the region.
The answer to that last question is likely to be of big interest to federal and state regulators, who are to review the terms of the deal and determine whether it complies with antitrust laws.
In 2021, President Joe Biden issued an executive order directing the Federal Trade Commission and the U.S. Justice Department to reevaluate and toughen federal rules for mergers and acquisitions, including those in health care, to prevent monopolies and business deals that would limit competition with a market.
Feds blocked 2022 Utah, New Jersey mergers
While hospital leaders often say mergers can help them cut costs, drive innovation and provide greater access to care, multiple research studies have shown that hospital consolidation can lead to higher prices for consumers and also drive down quality of care by reducing competition within a market. It also can reduce access to care and lead to employee layoffs and pay cuts.
In July, the Justice Department and FTC issued new draft guidelines, which would prohibit mergers that increase concentration in highly concentrated markets or eliminate substantial competition between firms.
Last year, the administration blocked a merger between HCA Healthcare and Steward Health Care System in Utah and RWJBarnabas Health and St. Peter’s Healthcare System in New Jersey.
If the combined Henry Ford Health/Ascension Michigan deal passes regulatory muster, there would still be five large-scale competitors in southeastern Michigan: Corewell Health, The Detroit Medical Center, Trinity Health, McLaren Health Care and the University of Michigan Health.
Ascension, facing losses, is selling hospitals
Many health systems across the U.S. are financially struggling in the aftermath of the COVID-19 pandemic and amid a staffing shortage and record levels of inflation. The costs of labor and supplies are going up while Medicare and Medicaid reimbursements remain stagnant.
Ascension, which is based in St. Louis, reported an operating loss of $3 billion in fiscal year 2023, and is selling many of its holdings, including seven subsidiary hospitals that were part of Milwaukee-based Ministry Health Care, which were sold to Aspirus Health.
When hospitals merge or are acquired to form larger health systems, they have greater leverage when it comes to negotiating prices to get higher reimbursements from insurance companies and lower prices from suppliers.
Blue Cross Blue Shield of Michigan President and CEO Daniel Loepp issued the following statement Wednesday, which read, in part: "Blue Cross Blue Shield of Michigan is proud of our long-term partnership with Henry Ford Health and Ascension to promote better outcomes and experiences for patients, while continuing to address high-quality care and affordability through value-based reimbursements."
Henry Ford, Ascension have differing values
Several other questions remain about how the combined health system would operate, including how they would manage the differences between them when it comes to reproductive health care and the treatment of LGBTQ+ patients and employees.
Ascension is a Catholic, nonprofit hospital system that abides by the Ethical and Religious Directives for Catholic Health Care Services established by the U.S. Conference of Catholic Bishops, Holly Fournier, associate director of communications for the Archdiocese of Detroit, told the Free Press in a previous interview.
The directives are based on the Catholic Church's teaching that life begins at conception and that sexual intercourse is a sacred act of procreation. The directives prohibit the use of contraception, as well as sterilization procedures, abortion and in vitro fertilization.
The directives also affect LGBTQ+ care, something Henry Ford has long touted, pledging on its website that it is "committed to providing safe, equitable care for all and supporting people in the lesbian, gay, bisexual, transgender and queer (LGBTQ+) community with their healthcare needs."
Henry Ford offers gender reassignment surgeries, gender-affirming hormone treatment and has a PRIDE Employee Resource Group.
Neither Henry Ford nor Ascension answered questions about whether the Archdiocese of Detroit or the U.S. Conference of Catholic Bishops' Ethical and Religious Directives would play any role in defining how LGBTQ+ care and reproductive health care is provided/delivered at Ascension properties.
Affected properties
The following Ascension southeast Michigan and Genesys health care properties would be included in the deal:
Ascension St. John Hospital
Ascension River District Hospital
Ascension Genesys Hospital
Ascension Macomb-Oakland Hospital, Madison Heights Campus
Ascension Macomb-Oakland Hospital, Warren Campus
Ascension Providence Hospital, Novi Campus
Ascension Brighton Center for Recovery
Ascension Providence Hospital, Southfield Campus
Ascension Providence Rochester Hospital
The following Henry Ford hospitals and other assets, including Health Alliance Plan, also would be included as part of the joint venture:
Henry Ford Hospital
Henry Ford West Bloomfield Hospital
Henry Ford Wyandotte Hospital
Henry Ford Kingswood Hospital
Henry Ford Macomb Hospital
Henry Ford Jackson Hospital
Ascension Michigan's southwest and northern hospitals are to remain part of Ascension's national holdings and continue to provide Catholic health care:
Ascension Borgess Hospital
Ascension Borgess Allegan Hospital
Ascension Borgess-Lee Hospital
Ascension Borgess-Pipp Hospital
Ascension St. Joseph Hospital
Ascension St. Mary’s Hospital
Ascension Standish Hospital
Contact Kristen Shamus: kshamus@freepress.com. Follow her on Twitter @kristenshamus.
This article originally appeared on Detroit Free Press: Henry Ford, Ascension plan to combine health care systems
